Student-Loan Bill Seeks To Streamline Process For Borrowers, College Officials

After a year of harvesting opinions from campuses nationwide,
several members of Congress are backing legislation aimed at
streamlining the financial-aid process for college students and
administrators.

The proposal, sponsored by Rep. Howard P. "Buck" McKeon, R-Calif.,
would give students more flexibility in taking out loans, and
university officials more leeway in awarding them, supporters say.

One part of the proposed bill would extend a federal law that allows
some colleges to give out loan money in single
installments—rather than disbursements given out over
time—for a quarter, trimester, or semester.

Another provision would let some higher education institutions
continue to waive a federal rule that forces first-year, first- time
borrowers to wait 30 days before receiving their loans.

Without the new legislation, both of those regulations are set to
expire later this year. Some college-aid officials say the current
provisions help students with irregular course schedules throughout the
year keep up with college costs, and keep others from defaulting on
their loans.

Seeking Suggestions

A year ago, Rep. McKeon launched a project called "Upping the
Effectiveness of Our Federal Student-Aid Programs," or FED UP for
short, seeking advice from students and college administrators on how
to reduce bureaucratic headaches in student financial aid. The project
received at least 3,000 responses, he said last week.

"We will take a great step forward in easing the regulatory burden
on our colleges and universities," said Rep. John A. Boehner, R-Ohio,
chairman of the House Committee on Education and the Workforce and a
backer of the legislation.

Mr. McKeon said the bill would allow Congress to make some progress
on student-aid issues before lawmakers take up the task of
reauthorizing the Higher Education Act, scheduled to begin next year.
Some thornier issues, he said, were purposely left out of the bill to
garner bipartisan support.

Rep. George Miller of California, the ranking Democrat on the House
education committee, said last week he was pleased with the
legislation, though he voiced disappointment that it does not address a
controversial federal law that bars students convicted of drug offenses
from receiving student financial aid.

"During the FED UP process, we received far more complaints about
the drug provision than any other," Rep. Miller said. The committee
should revisit the topic again when it considers the broader higher
education bill, he said.

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